After splashing $1B, Roche returns lagging cancer drug Gavreto to Blueprint Medicines

For Roche, it’s time to cut losses around the underperforming cancer drug Gavreto.

Roche is sending Gavreto back to Blueprint Medicines two and half years after the Swiss pharma paid $775 million up front to in-license the RET inhibitor. Shortly after the deal, the drug scored an FDA approval in non-small cell lung cancer bearing an abnormality in the RET gene.

The termination of the collaboration comes after Roche recently took a CHF 663 million ($711 million) impairment charge on Gavreto because of “lower sales expectations.” In a 2022 finance report published three weeks ago, Roche said Gavreto was “fully written down.”

For Blueprint’s part, the Massachusetts biotech said it has realized about $1 billion worth of financial benefits from the deal through upfront and milestone payments, plus clinical development and commercialization cost-sharing expenses.

The termination will take effect in 12 months as Roche and Blueprint work on a transition. Meanwhile, Blueprint said it will “explore options to advance and simplify” operations around Gavreto. 

Roche doesn’t anticipate any changes to its Gavreto-supporting team as the transition plan is being ironed out, a spokesperson for the Genentech unit told Fierce Pharma. And a Blueprint spokesperson said it isn’t planning any job cuts to its existing team.

Back when Gavreto won its initial FDA go-ahead, Blueprint’s chief operating officer Christy Rossi—then chief commercial officer—dubbed the drug as “the primary focus and priority” for the company’s marketing team. At that time, Blueprint’s first commercial product, Ayvakit, had suffered a setback in gastrointestinal stromal tumors and was losing its significance in the company.

Fast forward to the present, and Gavreto only ginned up CHF 26 million ($28 million) in sales last year. Retevmo, an earlier-to-market rival drug from Eli Lilly, performed better, generating sales of $192 million last year. Both drugs are also approved in RET-related thyroid cancer.

By comparison, Blueprint's Ayvakit netted $111 million in sales last year. The company now expects the KIT inhibitor to reach $1.5 billion in peak sales thanks to a potential expansion into indolent systemic mastocytosis, a blood cell disorder.

In parallel to the Gavreto transition, the company “will remain focused on our 2023 goals, with our highest priorities being the anticipated U.S. launch of Ayvakit (avapritinib) in indolent systemic mastocytosis and the ongoing advancement of our pipeline of investigational medicines,” Blueprint CEO Kate Haviland said in a statement Thursday.

For 2023, Blueprint doesn’t expect the Gavreto return will change its revenue projections, which include $40 million to $50 million in collaboration revenues, or its operating expenses.

The return of Gavreto comes at a transitional time for Roche. The company recently elevated Teresa Graham as its pharma chief to replace Bill Anderson, who is becoming CEO of Bayer. Roche’s pipeline has suffered multiple setbacks lately, including on TIGIT inhibitor tiragolumab, which missed the tumor progression mark in a key lung cancer study.

Also in the oncology department, Roche just took a CHF 292 million write-down on Rozlytrek because of lower sales expectations. The drug was the centerpiece of Roche’s $1.7 billion buyout of Ignyta back in 2017. It later won FDA approvals in ROS1-positive non-small cell lung cancer and NTRK gene fusion-positive solid tumors.

Editor's Note: The story has been updated with comments on job arranagements from Genentech and Blueprint.